The Centers for Medicare and Medicaid Services (CMS), part of the Department of Health and Human Services, issued a final rule banning nursing homes from using binding forced arbitration agreements if they receive funding from Medicare or Medicaid.

The new rule represents the first large-scale overhaul of nursing home funding regulations in more than 25 years.

This regulatory change prevents nursing homes that receive federal funding from requiring residents to sign arbitration agreements that force them to resolve disputes in private arbitration instead of in court.

The new rule is expected to offer significant legal protections to more than one million nursing home residents by allowing them to hold nursing homes accountable in the event that they are victims of nursing home abuse or wrongful death.

The rule will be implemented in phases, with the first starting on Nov. 28, 2016 and the second and third starting on the same date in 2017 and 2019.

Problems with Forced Arbitration

Many nursing home residents agreed to forced arbitration clauses without even realizing it, as these agreements were often included in the fine print on nursing home admissions contracts. Residents likely felt pressure to sign these agreements so they could be admitted and get needed care.

However, many residents do not understand what forced arbitration is and how it deprives them of the rights and protections they are entilted in a courtroom.

These clauses force residents to resolve disputes about abuse, neglect and quality of care in private as the results of these proceedings are kept confidential and out of the public record.

Furthermore, The New York Times conducted a one-year investigation into these agreements and discovered that the proceedings tend to favor nursing homes. The arbitrators are often lawyers hired by the nursing home that has been accused of abuse or wrongdoing.

The CMS first proposed changes to regulations on arbitration clauses in July 2015. However, the rule did not ban them, but instead said that nursing homes would lose funding if they required residents to sign arbitration agreements in order to be admitted.

Fortunately, the American Association for Justice, officials from 16 states and the District of Columbia, and countless other advocates pushed for a complete ban on forced arbitration agreements.

The nursing home negligence lawyers at D'Amico & Pettinicchi are very pleased with the CMS ruling as it helps protect the rights of nursing home residents.

We are staunch defenders of the rights of nursing home residents to be treated with dignity and respect and not have to suffer neglect or abuse.